Tesla ends referral program to improve profit margins

Elon Musk says the incentives add "too much cost" to the cars, especially the Model 3.

Elon Musk has announced that Tesla will soon put an end to its referral program, eliminating a series of unique incentives that had helped drive sales for the past few years.

The current referral program allows owners to give friends six to nine free months of Supercharging with the purchase of a new Model S, Model X or Model 3. Owners receive a photo launched into deep space for their first referral, a signed wall connector or kid's Model S for the second, and special wheels for their third referral.

Musk says the referral program has been "adding too much cost to the cars, especially Model 3."

The executive recently told employees that the Model 3 still costs at least $38,000 to build, requiring significant reductions to make a profit when the bare-bones base model arrives later this year with a $35,000 price tag.

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